Question

If $535 is invested at an interest rate of 6% per year and is compounded continuously, how much will the investment be worth in 10 years?
$1307.12
$974.83
$973.38
$403.43

Answer 1

A = Pe^rt , e = 2.718

A = 535 * (2.718)^(10 * 0.06)
A = 974.83

answer is $974.83

Answer 2

Principal, P = $535,  r = 6  per year = 6/100 = 0.06, n = number of years = 10

Amount for Compounded continuously:

A = Pe^(rt)                      where e = constant = 2.71828.....

A = 535*(2.71828)^(0.06*10)

A = 535(2.71828)^0.6       Use your calculator

A ≈ 974.833            

A ≈ $974.83            second option from the top

Therefore Amount in the invested after 10 years is ≈ $958.1035

Hope this explains it.